• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

F9 mar16/jun16 paper

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › F9 mar16/jun16 paper

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 8, 2016 at 12:34 am #338863
    bushra
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Hi, I’m hoping someone can help me on question 3 on the Mar16/Jun16 questions published on the ACCA website. I understand how the conversions were calculated but I’m not sure on how the market values of the loan notes were calculated for both part 1 and 2. Can someone please shed some light on this?

    September 8, 2016 at 7:07 am #338905
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    In order to decide whether to convert after 7 years or wait for 8 years and have them redeemed for cash, we need to know what the market value of them will be in 7 years time.

    If they wait for 8 year then they will receive the repayment of $1,000 and also receive one more years interest at 7%, so a total receipt of $1,070.

    To get the value in 7 years (which is 1 year earlier) we need to discount the $1,070 for 1 year. Then we can compare with the result of converting in 7 years time with the value of the debt in 7 years and decide which would be better.

    September 8, 2016 at 8:32 pm #339189
    bushra
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Thanks John,

    I’m not sure how the MV of the lain notes has been worked out.

    The answer shows (70 x 5.206) + (1075 x 0.583) = 991.15

    I can see how the DF have been used but I’m not sure where the 70 has come from?

    September 9, 2016 at 7:17 am #339268
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    The 70 is the interest each year (7% x 1,000), and the market value is the present value of all the future receipts – interest each year and the redemption/conversion.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • dkessilfie on FM Chapter 1 Questions – Financial management objectives
  • ahmadhoney on ACCA Advanced Audit and Assurance (AAA) The Audit Report 3: Types of Audit Report
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Ken Garrett on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)
  • Bimasha@123 on Discounted Cash Flow Techniques – ACCA Advanced Performance Management (APM)

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in